America's Only Hope

With this presidential election next tuesday, America will pass the point of no return - or tipping point. Given Barack Obama's tax plan and the near certainty it will be supported by his cheerleaders in congress, more people will be the beneficiaries of government spending than there will be paying taxes to fund it. The only way that can work to maintain a viable economy is if the providers of support have incentives to continue to do so. Under this plan, they won't.

Consequently, the American economy is in for a prolonged period of stagnation and decline. There is no way out of the situation given the current system of taxation and the implementation of a philosophy of redistribution of income. Those who will get a free ride will not vote to re-impose taxes on themselves. And the Democrats who created the situation are unlikely to re-impose the taxes since it would cost them votes. This is not rocket science or advanced graduate economics. It is common sense.

The only non-violent solution to escape from a future of economic regression is to trash and eliminate the income tax. The only method of taxation going forward that is fair and equitable and that will allow for the regeneration of sustainable economic growth is the consumption tax. Whether it is a sales tax or a value-added tax, it would give the innovators and industrious the incentives of profiting from their efforts as they would be allowed to keep what they earned rather than having a significant portion of their earnings confiscated by the government.

A return to prosperity would also require that congress restrain its spending habits, an event that has to occur at some point as tax revenues under the current system dwindle and the cost of borrowing becomes prohibitive. Of course, the only way to keep government spending under control on a sustainable basis is to deny incumbents the ability to buy votes by imposing term limits on every elected official. That is a subject for another day.